A 40 year old man in the United States has a 0.199% risk of dying during the nextyear. An insurance company charges a premium of $429pays a $166,010 death benefit. What is the expected gain or loss to the man whenfor a life-insurance policy thatpurchasing the insurance policy?Hint: Calculate the expected loss of the premium if the man survives (always a negativevalue), then subtract the premium from the death benefit and calculate the expected gainto the beneficiarles if the man dies (always a positive value), and then add these twonumbers to find the net result. A negative net result should be entered as a negative valueIn the box below.Note: Please avold rounding numbers in the middle of your calculations. However, round yourfinal answer to two decimal places, before entering it in the box below. A negative final answerindicates an expected loss for purchasing the policy.

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Answered: A 40 year old man in the United States…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter9: Insuring Your Health

Section: Chapter Questions

Problem 2FPE

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1. A 40 year old man in the U.S has a 0.242% risk of dying during the next year. An insurance company charges $260 per year for a life-insurance policy that pays a $100,000 death benefit. What is the expected value for the person buying the insurance? Round the answer to the nearest dollar.
Darius, age 42, wants to pay no more than $800 a year in life insurance. If the annual life insurance premium rate (per $1000 of face value) is $5.38, what is the largest 15 year term policy he can buy without spending more than SS00 annually a S$38,000 b. 580,700 C.5800,000 d. $148.700
Darius, age 52, wants to pay no more than $800 a year in life insurance. If the annual life insurance premium rate (per $1000 of face value) is $5.38, what is the largest 15-year term policy he can buy without spending more than $800 annually? $538.000 $80.700 $148 700 $800,000
A health insurance company that provides insurance against death has a previous year's reserve of $2,000. Calculate the probability that it will be solvent for the entire year knowing that 100 people use the company, who pay a premium of $100 at the beginning of the year, the probability of dying during the year is 0.01, and the benefit paid is $5000. To what amount can the premium be reduced so that the above probability does not fall below 80%.?
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At the beginning of 1965, Mr. A, 47 yrs old, signed a contract with Mrs. C, who claimed to be 90 years old: he would pay her 30,000 French Francs at the end of each year until she died, at which point he would inherit her Paris apartment. Assuming a 90yr old woman has a 40% chance of living 4 years (four payments), and a 60% chance of living 5 years (five payments), and an 8% discount rate. Mr. A died 30 years later, in 1995, at the age of 77. His children continued making payments after he died because Mrs. C survived until the end of 1997 (supposedly at the age of 122). A) What would the PV of the contract have been (in 1965) if one knew there would be 33 payments? B) What was the Future Value of this contract at the end of 1997? Solve in 10 min get 2 like
After the birth of your first child, you decide to buy a life insurance policy for yourself but can't decide how much to buy. In the event of your untimely death, you estimate that the life insurance money can be invested in an account earning 8% interest compounded monthly. You would like your child to get a monthly payment of $1,500.00 for 18 years.How much should your life insurance policy be worth in order to achieve your goal? I should get a life insurance policy that is worth $_______
Joanne has an existing whole life policy that she is considering to discontinue due to financial difficulty caused by COVID-19 pandemic. The current cash value of the whole life policy is approximately RM10,000. The policy has another 40 years to reach its maturity date. Advise Joanne the FOUR (4) options that are available to her before she discontinues the policy.
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